If A and B are substitutes and the cost of a factor of production used in the production of A increases, then the price of

Question

Quizplus · Accepted Answer

When the cost of a factor of production for A increases, the production cost of A increases, leading to a higher price for A. Since A and B are substitutes, the demand for B will increase as consumers switch from A to B, leading to a higher price for B as well.

If a and B Are Substitutes and the Cost of a Factor